| Investments |
3. Investments
The following table provides the Company’s investment income, and realized gains on investments for fiscal 2021:
|
|
|
|
Investment income, net of investment expenses |
|
$ |
493 |
Realized gains on investments |
|
$ |
46 |
Realized losses on investments |
|
$ |
(91) |
The following table provides the amortized cost, fair value and unrealized gains and (losses) of the Company’s investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
|
|
|
Gross Unrealized |
|
|
|
|
|
Amortized Cost |
|
Gains |
|
Losses |
|
Fair Value |
U.S. government obligations |
|
$ |
10,983 |
|
$ |
29 |
|
$ |
(27) |
|
$ |
10,985 |
Obligations of states, municipalities and political subdivisions |
|
|
4,378 |
|
|
5 |
|
|
(12) |
|
|
4,371 |
Corporate bonds |
|
|
32,208 |
|
|
183 |
|
|
(48) |
|
|
32,343 |
Residential and commercial mortgage-backed securities |
|
|
15,380 |
|
|
63 |
|
|
(55) |
|
|
15,388 |
Other loan-backed and structured securities |
|
|
5,703 |
|
|
11 |
|
|
(13) |
|
|
5,701 |
Total debt securities |
|
$ |
68,652 |
|
$ |
291 |
|
$ |
(155) |
|
$ |
68,788 |
The amortized cost and fair value of securities at September 30, 2021, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|
|
|
|
|
|
|
|
|
September 30, 2021 |
Remaining Time to Maturity |
|
Amortized Cost |
|
Fair Value |
Due in one year or less |
|
$ |
8,741 |
|
$ |
8,731 |
Due after one year through five years |
|
|
20,828 |
|
|
20,841 |
Due after five years through ten years |
|
|
15,696 |
|
|
15,808 |
Due after ten years |
|
|
2,304 |
|
|
2,319 |
Residential and commercial mortgage-backed securities |
|
|
15,380 |
|
|
15,388 |
Other loan-backed and structured securities |
|
|
5,703 |
|
|
5,701 |
Total |
|
$ |
68,652 |
|
$ |
68,788 |
Other-than-temporary Impairment
The Company regularly reviews its individual investment securities for other-than-temporarily impairment. The Company considers various factors in determining whether each individual security is other-than-temporarily impaired, including:
|
- |
the financial condition and near-term prospects of the issuer, including any specific events that may affect its operations or earnings; |
|
- |
the length of time and the extent to which the market value of the security has been below its cost or amortized cost; |
|
- |
general market conditions and industry or sector specific factors; |
|
- |
nonpayment by the issuer of its contractually obligated interest and principal payments; and |
|
- |
the Company’s intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs. |
Securities with gross unrealized loss position at September 30, 2021, aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less Than Twelve Months |
|
Twelve Months or Greater |
|
Total |
|
|
Gross |
|
|
|
Gross |
|
|
|
Gross |
|
|
|
|
Unrealized |
|
Fair |
|
Unrealized |
|
Fair |
|
Unrealized |
|
Fair |
At September 30, 2021 |
|
Loss |
|
Value |
|
Loss |
|
Value |
|
Loss |
|
Value |
U.S. government obligations |
|
$ |
(27) |
|
$ |
6,073 |
|
$ |
— |
|
$ |
— |
|
$ |
(27) |
|
$ |
6,073 |
Obligations of states, municipalities and political subdivisions |
|
|
(12) |
|
|
1,274 |
|
|
— |
|
|
— |
|
|
(12) |
|
|
1,274 |
Industrial and miscellaneous |
|
|
(48) |
|
|
11,978 |
|
|
— |
|
|
— |
|
|
(48) |
|
|
11,978 |
Residential and commercial mortgage-backed securities |
|
|
(55) |
|
|
9,108 |
|
|
— |
|
|
— |
|
|
(55) |
|
|
9,108 |
Other loan-backed and structured securities |
|
|
(13) |
|
|
3,450 |
|
|
— |
|
|
— |
|
|
(13) |
|
|
3,450 |
Total securities |
|
$ |
(155) |
|
$ |
31,883 |
|
$ |
— |
|
$ |
— |
|
$ |
(155) |
|
$ |
31,883 |
At September 30, 2021, there were 260 securities in an unrealized loss position. Of these securities, there were none that had been in an unrealized loss position for 12 months or longer.
The Company believes there were no fundamental issues such as credit losses or other factors with respect to any of its available-for-sale securities. The unrealized losses on investments in fixed-maturity securities were caused primarily by interest rate changes. It is expected that the securities would not be settled at a price less than par value of the investments. Because the declines in fair value are attributable to changes in interest rates or market conditions and not credit quality, and because the Company has the ability and intent to hold its available-for-sale investments until a market price recovery or maturity, the Company does not consider any of its investments to be other-than-temporarily impaired at September 30, 2021.
|